Rent could rise for startups in Lammert Building

Looking for cheap office space downtown? There’s no better spot than at T-REx, where entrepreneurs pay as little as $80 per month with a premium package costing just more than $275 per month. That’s thanks to a cushy lease agreement with Railway Exchange Building owner Rick Yackey.

But those rates could change when T-REx startups move into the Lammert Building on Washington Avenue, said Kevin Farrell, senior director of economic and housing development for The Partnership for Downtown St. Louis.

Farrell said rates could be marginally higher, but not too much higher, from what entrepreneurs pay today. Farrell also said that because the physical space is different — Lammert has larger rooms than in the Railway Exchange Building — the Lammert Building is more efficient.

“(Rates) are something we’ve started working on, and I think they will be very comparable to what we are now offering,” Farrell said.

T-REx officials closed on a deal to buy the Lammert Building on Tuesday. The deal was fostered by $4.9 million in New Markets Tax Credits allocated by St. Louis Development Corporation, which raised a $1.7 million investment from St. Louis-based U.S. Bancorp Community Development Corporation.

T-REx officials have prided themselves in offering low rental rates for their tenants. Keeping the low cost of space — and space flexibility — were key parts of T-REx’s search for a new home.

Those low rates have been one of the main reasons that more than 70 startup companies and support programs have set up shop in T-REx.

Farrell said the changing makeup of startup teams is also a factor in where rates end up.

“We’re seeing new companies come in with larger teams,” he said. “It’s no longer just a one-person idea company (needing space at T-REx). Companies are already coming in with two, three or four people, which allows them to share office space. So the cost per person will be comparable, but the (actual) office cost may be higher.”

With a permanent home now in place, T-REx officials will immediately look to raise money in order to build out and polish the sixth, seventh and eighth floors of the Lammert Building — the floors it initially plans to occupy upon moving, which Farrell estimates will be done in phases over the next six months.